Q&A with The Innovator’s Prescription Author Jason Hwang

  • Share
  • Read Later

Health care in the U.S. needs more than a gentle tweaking. It needs to be disrupted, updated, and reinvented to provide better care at a price that the individual and society as a whole can afford. When it comes to health care, we as consumers simply aren’t getting our money’s worth. Health care is crying out for innovation, and the authors of The Innovator’s Prescription: A Disruptive Solution for Health Care have a plan.

At last check, The Innovator’s Prescription was the number one selling book on Amazon in the categories of Health Care Delivery and Health Policy. I spoke with Jason Hwang, M.D., M.B.A., one of the book’s authors, about how to fix health care in America, and how the book’s suggested business-model type innovations might work in the real world.

Cheapskate: In the ongoing health care debates, what big points are politicians, doctors, and others overlooking?

Jason Hwang: Most people are talking about how we as a nation would pay for health care reform—the trillions of dollars that are mentioned all the time in the news. But firstly, we should be talking about bringing health care costs down in general, and making it more affordable for the individual, and for the country. We need to reexamine the way we deliver health care, the way we teach our doctors, and the way we teach our doctors to do their jobs. The business of health care is simply outdated. By updating the way we deliver health care, by streamlining the system and making it more efficient and business-like, the trillions of dollars in any health care bill gets trimmed down quite a bit.

The problem is that many people’s careers depend on the current health care system. They thrive on the way things are done now. Reformers are up against the guild mentality of doctors’ associations, hospital groups, and insurers. The way they lobby for influence leads to a sort-of locking in of the system, and changing that system is really difficult. Everybody carved out their share of the pie long ago, and now no one else can break in and take a slice or figure out a smarter way to divide it up.

CS: Why hasn’t the free market improved efficiency in health care already? Why is innovation moving so slowly (or not at all)?

JH: When it comes to health care, there really is no free market. It’s really restrained. The third-party reimbursement system has been compared to systems under communism, and rightly so, in that prices charged for health care services have little to do with market forces. The consumer is removed from the equation, and the prices for doctor’s visits or hospital stays or drugs don’t follow market behavior. Insurers are in the middle of these transactions, and the average consumer is not involved in decisions about how their money is spent. This is part of the reason why costs have skyrocketed—people are out of touch with the way their health care dollars are spent. It’s largely out of their control.

There are obstacles in the way that make efficiency and true reform difficult. The reimbursement system and the pricing system, in particular, hurt innovation, make it nearly impossible.

CS: What are the most obviously inefficient and wasteful practices in health care? What should innovators target first?

JH: Right now, there’s a tremendous reliance on two institutions: the hospital and the physician’s practice. These are highly centralized systems for delivering health care, and because they’re so centralized, they’re highly inefficient. There need to be other options. We need to create new professions and new systems to become more efficient in delivering health care. We would still need facilities and well-trained doctors for the most severe cases, but many other medical needs could be handled by other means. Care could be delivered by health professions at an employee’s workplace, or even at home via webcam or phone.

Relying entirely on doctors and hospitals to treat things like chronic illnesses is foolish. There’s a mismatch between consumer health needs and the business models currently used to treat them. For chronic diseases, we should foster online networks and forums in which people can share information with each other. Medical community leaders can help oversee these forums, list guidelines to follow, and issue statements about the validity of suggested treatments.

We need to open up how people view the system and get information. We do patients a disservice when doctors tell people, “Don’t do anything without seeing me first.” But the patient can only see the doctor two times a year without it costing extra.

CS: Let’s talk about high-deductible insurance, and why it might be better than most people’s policies today. Should health insurance be more like auto insurance, in which car owners pay full price for upkeep (oil changes or checkups) and only use the insurance if something big happens (engine dies or your kid needs surgery)?

JH: Overall, there needs to be more participation from the public regarding medical care and its costs. We need to create channels in which clear information reaches patients and helps them make decisions. We need transparency. Once people are better informed, they should be able to make better decisions, including whether or not something like high-deductible insurance makes sense for them.

In the book, we’re in favor of people having HSAs [health spending accounts], which people can use as they see fit, wisely, prudently. But without accurate information that people have open access to, in language they can understand, it’s difficult for a person to know what to do.

What I would suggest is that everyone gets catastrophic care automatically—for the really, really expensive cases that would bankrupt anyone. In addition to that, people could put money into HSAs, and they can choose what level deductible makes sense to them, and how they might spend their HSA money from year to year.

Without a bare minimum of catastrophic care for all citizens, everybody has to fend for themselves. I don’t want to live in a society like this. As it is now, hospitals provide lots of uncompensated care. We have, in a way, universal coverage already, but it’s backwards. Health care is too expensive for many people, and so what happens is that they show up in the emergency room when they’re desperate and too sick to do anything else. The hospital treats them, knowing that the patient can’t pay. So that’s how we provide universal coverage today.

The better solution is that everybody gets catastrophic care, and also that we build a system to help people get affordable (or free) preventive care. That way, many cases don’t get to the stage when only surgery or other expensive treatments can help. As it is now, lots of people wait until they’re so sick they have nowhere else to go, and so they just show up at the hospital.

CS: People are scared of health records being kept electronically. Should they be?

JH: This is a valid concern. But it shouldn’t slow us down in terms of reforming the system. We absolutely must remain vigilant protecting people’s privacy, including their health records. But think about it: There were similar concerns when online banking and using credit cards online were new. There are still some risks there, but then again, there are different risks when you’re walking around with cash in your pocket.

The other point is that, if you think health records are secure now, you’re mistaken. Go into any hospital and I know you’ll find papers filed in the wrong place and information being spread where it should not be going. So, right now, your health records are not as safe as you might think.

The upsides of making health records digital are huge. Right now, we repeat a staggering number of tests unnecessarily. If patients had e-records, those numbers—and the corresponding costs for those tests—would come down substantially. With e-records, we wouldn’t have to worry about things like mistakes made because of doctors’ messy handwriting. It would also be easier to mine data for the effectiveness of various treatments, which would improve care and bring costs down at the same time.

CS: If innovation occurs as suggested in the book, do you envision people seeing actual doctors less? If so, how can you assuage people’s fears?

JH: We’re not suggesting that anyone’s access to a doctor should be shut off. We think it should be a choice. You can always see a doctor, but you’ll have to pay for the privilege. We need doctors and always will need doctors to deal with complex medical problems. The traditional doctor’s room visit for every little issue, however, is simply outdated. For situations in which seeing a doctor in person seems unnecessary, perhaps a nurse practitioner, a webcam interview, or an online chat with a medical professional will suffice. The patient would still pay for each of these services, and the marketplace would dictate how much these services would cost.